Private sector jobs rise for first time since 2008

By Caroline Valetkevitch

NEW YORK (BestGrowthStock) – Signs of a recovery in the U.S. labor market grew on Wednesday as reports showed job growth among private companies and plans for layoffs falling to their lowest levels in four years.

The private sector added 32,000 jobs in April, according to the report by payrolls processor ADP Employer Services. Economists had expected a rise of 30,000 jobs, based on a Reuters poll.

The data comes two days before a closely watched U.S. payrolls report, which is expected to show a second straight month of job gains.

“Private sector employment growth is another encouraging sign the labor market is turning the corner and the last pillar of the recovery looks to be now in place,” said Zach Pandl, economist at Nomura Securities International in New York.

Other data on Wednesday showed the pace of growth in the U.S. services sector was unchanged in April compared with March and expanded below the rate forecast by analysts.

The Institute for Supply Management report’s employment component fell slightly to 49.5 from 49.8 the prior month.

The February and March private sector ADP figures were revised to show gains instead of losses. The last time the private sector registered job gains was in January 2008, according to ADP.

The private sector jobs data could have little impact on forecasts for Friday’s payrolls, which are likely to show gains from the addition of U.S. census workers, said Joseph Lavorgna, senior economist at Deutsche Bank in New York.

The report “doesn’t preclude us from having a 200,000-plus number on Friday,” he said.

Recent data has pointed to strength in the economic recovery but unemployment remains high, at 9.7 percent, and is expected to stay at that level in April.

The U.S. government’s monthly jobs report is expected to show nonfarm payrolls increased by 200,000 in April, adding to March’s 162,000 gain, according to Reuters forecasts.

Temporary jobs to conduct counts for the census, held every 10 years, will likely account for the bulk of the April gain, with private sector hiring expected to pull back from March’s spectacular 123,000 increase.

U.S. stock prices declined, while U.S. Treasury yields fell and the euro fell (Read more about the trembling euro. ) against the U.S. dollar after the data was published, as Greece’s debt problems continued to weigh on investors.

“Any job growth here is encouraging but not big enough for the markets to shift away their focus on issues like Greece and deficits,” said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

The ADP report, jointly developed with Macroeconomic Advisers LLC, showed the March figure was revised to show a gain of 19,000 from an originally reported fall of 23,000, and a rise of 3,000 for February.

“Employment has turned the corner in total and is moving up and has been for several months now, but gains so far remain muted,” said Macroeconomic Advisers LLC chairman Joel Prakken.

The ISM’s services index held at 55.4 in April from March, below the 56.0 median forecast of 74 economists surveyed by Reuters. A reading above 50 indicates expansion.

Employers announced 38,326 planned job cuts last month, the lowest number of layoffs since July 2006 and down from 67,611 planned job cuts in March, outplacement consultants Challenger, Gray & Christmas said in a report.

Adding to the day’s upbeat economic news, Mortgage Bankers Association data showed demand for loans to buy U.S. homes hit a seven-month high last week.

Home purchase loan applications jumped 13 percent in the week ended April 30 to the highest since early October, overshadowing a 2.1 percent drop in demand to refinance loans. Total mortgage applications rose by a seasonally adjusted 4 percent, the trade group reported.

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(Additional reporting by Burton Frierson, Edward Krudy, Lynn Adler, Leah Schnurr and Chuck Mikolajczak; Editing by Padraic Cassidy)

Private sector jobs rise for first time since 2008